AGM 2010 Speech by BPN Nyajeka

10 May 2010

There has been a significant positive change from where the Group was last year and where we are now. We believe we are now in a stronger position.
For the first quarter of 2010, we achieved an operating profit just above USD300k and we are confident that our current performance trajectory will take us through to profitability at the end of this year. As mentioned in the Chairman’s Statement contained in the 2009 Annual Report, the Group is leveraging on balance sheet resources which are available to us today as a means of financing growth for our investee companies going forward, rather than to ask shareholders, for the capital. This is consistent with our commitment to maximize sustainable shareholder value.

Turning to our sector review…

Insurance

Zimbabwe

  • Started to see increase in premium revenues.
  • Gross written premiums for Zimbabwe insurance companies totaled $7 million for the first quarter versus $9,6 million achieved for the full year in 2009.
  • Application for approval of capitalization structure of Zimbabwe insurance businesses from Group internal resources of $4 MN has been lodged with RBZ .

Outside Zimbabwe

  • · Performance is pleasing.
  • · Gross written premiums totaled $7,9 million 14 % up on the same period last year.
  • · Issues we are addressing:
    • Currently modernizing IT platform to enhance the customer experience, achieve greater efficiencies in client-facing as well as product marketing and distribution
    • Firm emphasis is being placed on broadening the product development and expanding distribution channels.

Hotels

Cresta Zimbabwe

  • Revenues $ 2 million versus $6 million for the full year in 2009.
  • Occupancy levels have risen to 42% in the first quarter of 2010 as compared to 25% for the same period in 2009
  • 1Q ARR has improved to $52 versus $37 at December 2009.

Cresta Marakanelo (Botswana)

  • Occupancy levels are at 70% versus 66% last year.
  • Average room rates –Pula 670 vs Pula 570 last year.
  • Cresta Lodge Gaberone refurbishments have been compelted and handover is scheduled to take place beginning of June 2010.
  • Refurbishment of Riley’s Hotel is underway.
  • Rebranding of the entire hotel portfolio in Botwswana is running on-schedule – key objectives are greater product differentiation and consistency across all hotel properties for the Cresta identity

Issues we are addressing:

  • Fundraising for renovation of Cresta Zimbabwe is gaining momentum – first phase is focused on Cresta Lodge. This will cost $6 million which will be raised on the back of Group balance sheet.

Agrochemicals

To date we have produced more than 40,000 tonnes of Ammonium Nitrate compared to 46,000 produced for the full year in 2009.

Capacity utilization is currently at 40% versus 20% last year.

Catalysts for growth:

  • We are currently running on 9 electrolytors. 10 of 14 electrolyters expected to be up and running by end of June.
  • 57 railway cars in use to transport ammonia, from Sasol South Africa to the electrolysis plant versus 40 as at end of last year

Issues we are addressing:

  • Electricity tariff negotiations with government are underway with a view to reset prices to a viable tariff .
  • Financing options for the first phase of the electrolytor refurbishment program are currently under review. The first phase is aimed at fully refurbishing 3 electrolytors at a cost of $11.25 million. This will be financed through a combination of debt and Sable’s own resources.